The annual pace of inflation slowed in October as increases in the price of gasoline were smaller than in September, Statistics Canada reported Friday.
Its consumer price index was up 1.4 per cent in October compared with a year ago, following a 1.6 per cent increase in September. Excluding gasoline, the index was up 1.3 per cent compared with a year ago – more than the 1.1-per-cent increase in September.
Prices were up in seven of the eight major categories compared with a year ago with the transportation and shelter categories contributing the most.
Transportation prices last month were up 3.0 per cent compared with a year ago following a 3.8 per cent increase in September as gasoline prices were up 6.5 per cent year over year in October compared with 14.1 per cent in September in the aftermath of hurricane Harvey. Shelter costs were up 1.2 per cent.
Prices for alcoholic beverages and tobacco products were up 2.7 per cent from a year ago, while food costs were up 1.3 per cent as food bought in restaurants gained 2.9 per cent.
Prices for clothing and footwear, the only category to move lower, fell 1.5 per cent compared with a year ago as the cost of women’s clothing fell 4.6 per cent compared with a year ago.
The Bank of Canada, which uses a two per cent inflation target in setting monetary policy, raised its key interest rate target twice this year following strong economic growth to start 2017.
However, economists expect growth for the second half of the year to come in at a slower pace and the central bank has suggested that while further rate hikes are likely, they will be cautious and pay close attention to the incoming economic data.
Of the Bank of Canada’s three preferred measures of core inflation, which seek to look through the noise of more-volatile items, CPI-common increased to 1.6 per cent compared with 1.5 per cent in September, while CP-median slipped to 1.7 per cent from 1.8 per cent. CPI-trim held steady at 1.5 per cent.